Pixelworks Inc. spinout Elemental Technologies Inc. has landed $7.1 million in venture capital investment, the downtown Portland startup said this afternoon, and plans to begin selling its first products this fall.

ETI's software adapts or edits computer video. It can convert a DVD for playback on iPods and other gadgets, or speed the editing process for high-end users.

ETI is working with Silicon Valley-based graphics chip company NVIDIA Corp., which will help distribute ETI's software. Eventually, the Portland company plans to create versions of its programs to run on graphics chips from microprocessor manufacturers Intel and Advanced Micro Devices Inc.

The new funding represents a rare piece of good news for Oregon's electronic display industry, which has been all but wiped out by the spectacular declines of Pixelworks, InFocus Corp. and Planar Systems Inc.

It's also good news in Oregon's startup community, which landed just a handful of venture investments during the first half of the year after a banner 2007.

Elemental Technologies' new investment is led by Seattle-based Voyager Capital and by a Boston firm, General Catalyst Partners. The $1.6 million in private "angel" investment ETI raised last year is being rolled into this venture round, according to the company.

Voyager recruited former Intel Vice President and Pixelworks board member Frank Gill to join ETI's board. Also on the board are Neil Sequeira from General Catalyst Partners and Erik Benson from Voyager. Former Adobe Systems chief executive Bruce Chizen will sit on the board as an observer without fiduciary responsibility.

Even as ETI's 15 employees celebrate their new backing, they're also racing to complete two lines of software in time for their launch. And they're moving into new offices near Portland State University.

A beer bottle sat empty in the company's new lab earlier this week, while a pirate flag adorned the office of ETI chief executive Sam Blackman, one of three engineers who left Pixelworks to help start the company.

Dressed in shorts and sandals, Blackman, 32, said his staff recognizes that the new funding and product launches represent a crucial moment.

"We're trying to deliver two very ambitious products that are in two different spaces: One's consumer, one's professional," he said. "Right now we're in make-or-break mode."

ETI will be aided by its association with NVIDIA, which will help sell the Portland company's consumer software and will give away a high-end editing program to people who buy a specific NVIDIA graphics card.

First products

• Badaboom Media Converter: Converts DVDs, home video and other digital media for playback on iPods, iPhones, Xboxes and other gadgets. Consumer version costs $30, professional version is $100. Due out by the end of September.

"Any of these applications we can support obviously is good for a GPU (graphics processing unit) company," said NVIDIA spokesman Brian Burke.

Dedicated graphics processors isolate one of a computer's most sophisticated tasks -- displaying video -- on a chip specially designed to handle the job. That improves video processing and frees the computer's primary brain, the microprocessor, to do other work.

NVIDIA, founded and run by Oregon State grad Jen-Hsun Huang, is the largest graphics processor company. But Intel and AMD are rapidly advancing with their own technology, making GPUs among the most competitive parts of the computer hardware business.

ETI plans to tap into the rapidly growing field with its software, Blackman said.

Elemental Technologies represents a potential for rebirth in Oregon's electronic display industry, once its most robust homegrown technology. But foreign competition and failed product launches, among other troubles, have all but driven the sector from Oregon.

Video chip company Pixelworks, for example, has never succeeded in getting manufacturers to use its technology and has moved most of its operations to San Jose and China.

In Oregon's venture capital community, ETI's new investment represents the second big funding round this month. Last week, NexPlanar Corp., a small semiconductor company that recently moved to Hillsboro, announced it had raised $14.5 million in venture capital.

Those two investments break a long drought among Oregon startups, which have reported only a handful of venture deals this year. Oregon startups raised just $8 million in the first quarter of 2008, down from nearly $50 million in the same period last year. Data on second-quarter investments is due out Saturday.